U.S. jobless claims increase more than expected

JobsReuters

The number of Americans filing for unemployment benefits increased more than expected last week, but the underlying trend remained consistent with a tightening labor market.

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Initial claims for state unemployment benefits rose 20,000 to a seasonally adjusted 245,000 for the week ended Dec. 16, the Labor Department said on Thursday. Data for the prior week was unrevised. Since mid-October, claims have been confined to a range of 223,000 to 252,000.

Economists polled by Reuters had forecast claims rising to 231,000 in the latest week. Last week marked the 146th straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was smaller.

The labor market is near full employment, with the jobless rate at a 17-year low of 4.1 percent. Labor market tightness and a strengthening economy encouraged the Federal Reserve to increase interest rates last week for a third time this year. The U.S. central bank has forecast three rate hikes for 2018.

A Labor Department official said claims-taking procedures continued to be disrupted in the Virgin Islands months after Hurricanes Irma and Maria battered the islands. The official said processing of claims in Puerto Rico was still not back to normal. Claims for Maine were estimated last week.

Last week, the four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose only 1,250 to 236,000.

The claims data covered the survey period for December’s nonfarm payrolls. The four-week average of claims fell 4,000 between the November and December survey weeks, suggesting another month of strong job growth.

The economy added 228,000 jobs in November. It needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.

The claims report also showed the number of people receiving benefits after an initial week of aid increased 43,000 to 1.93 million in the week ended Dec. 9. The four-week moving average of the so-called continuing claims rose 4,250 to 1.92 million.